Feb. 27 (Bloomberg) -- The value of Renewable
Identification Numbers for corn-based ethanol rose to a record
on concern that biofuel production and consumption won’t meet
U.S. targets.

Prices for RINs, the credits that help the Environmental
Protection Agency track whether refiners are meeting federal
biofuel-use mandates, jumped to 53 cents from about 45.5 cents
yesterday, according to Blue Ocean Brokerage LLC in New York.

Ethanol production has dropped 16 percent to an annualized
rate of 12.4 billion gallons last week from a record in December
2011, a government report showed today. That’s short of the 13.8
billion refiners are required to use this year. Falling gasoline
demand plus higher ethanol consumption targets is known as the
“blend wall.”

“There is some concern that the combination of low ethanol
production this year with the potential to hit the blend wall
next year could result” in a shortage of RINs, said Michael
Breitenbach, an analyst and trader at Blue Ocean.

Refiners can use the credits in lieu of blending a physical
gallon, according to Geoff Cooper, vice president of research
and analysis at the Renewable Fuels Association, a Washington-based trade organization.

The government wants U.S. refiners to use escalating
amounts of ethanol in gasoline, up to 15 billion gallons by
2015. That comes as consumption of the motor fuel shrinks.

Higher Levels

Ethanol industry advocates have pushed for higher
concentrations of the biofuel in gasoline, to 15 percent, a
level also called E-15, from 10 percent to help meet targets.

The EPA said in 2011 it would allow the higher blends at
filling stations for cars made after 2001. Organizations
including the American Petroleum Institute have called for more
testing and last week said that they petitioned the U.S. Supreme
Court to overturn the EPA’s decision.

“Everyone is really worried that E-15 is not going to kick
in and gasoline demand is going down,” said Beatriz Pupo, an
analyst at Kingsman SA, a Lausanne, Switzerland-based sugar and
biofuels research firm. “Everybody’s anticipating that they
will need more RINs because they won’t have enough physical
production.”